Stock Market Terms

The Basic Stock Market Terms

Annual Report. A report that is produced yearly by all public quoted companies for their shareholders.

Ask. The lowest price a seller wants to sell his or her share of a stocks or securities.

Ask Size. The amount of a stock that the company is offering for sale.

Assets. Is what you called everything that a company or persons own that has value like money, securities, real estates, cars etc. Assets are listed on a company’s balanced sheet or a person’s individual net worth.

Authorized Stock. The type and number of shares of a stock that a company or corporation can sell.

Balance Sheet. A financial statement that show the company’s assets and liabilities.

Bargain. Regarding a purchase in the stock market.

Bearer Stock. A stock that is not registered to its owner’s name.

Bear Market. This is what you call a market when its stock prices are down.

Bid. The highest price a buyer can offer to buy shares or stocks.

Bid Size. The quantity of shares a buyer want to buy in a specific stock.

Blue Chip. Shares or stocks of a big and reputable company that is known to be paying its investors dividends and has strong investment qualities.

Board Lot. The standard number of shares or stocks set by the stock exchange as a trading unit.

Booked Orders or Outstanding Orders. These are the orders that have not been traded immediately.

Book Value. The value of a company when all its assets and common stock equity are summed up and all its liabilities are subtracted from the resulted sum.

Broker. These persons are the link of an investor to the stock market. They are the ones doing the transactions(buying and selling) an investor requests to do.

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Bull Market. This is what you call a market when its stock prices are up.

Business or Trading Day. These are the days the stock market is open for trading, from Mondays to Fridays.

Call Option. An option that a holder has the right to use to buy a fixed amount of a certain stock at a specified price and time.

Capital. This is the amount of money used in starting a new business.

Capital Stock. Shares representing the companies, includes both preferred and common.

Cash Dividend. A type of dividend that is paid in cash.

Certificate. A document that shows a person’s ownership of a stock, bonds or other securities

Close Price. The closing price or the final price that a security is traded from any given day.

Commission. The fee charged by a stockbroker or a brokerage firm to an investor that used their services.

Common Stocks or Common Shares. A class of stock that has voting privileges and has the right to receive dividends, only after the preferred shareholders are paid. In an event of liquidation, they would be the last ones to receive their investments back. These class of stocks are the most frequently issued stock by companies or corporations.

Day Order. An order that is only valid for a single day when it is entered.

Debentures. A stock issued by companies or corporations that are backed by its assets.

Diversification. A way some investors use to reduce risk by buying different types of securities from different companies from different sectors of the economy.

Dividends. Company’s profits that are distributed to its shareholders.

Equities. Ordinary shares that are different from debentures. These are common or preferred stocks that represents an investors ownership of the company.

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Gross. The interest paid that is not yet deducted by taxes.

Hedge. A strategy that insures risk.

Inflation. The overall increase in prices of goods and services.

Initial Public Offering. Shares issued by former private companies that becomes a public company.

Investment Advisor. Persons that offers investment advice to their clients and may also trade securities in behalf of their clients.

Issued Stock. The number of shares issued to an investor in exchange of cash or assets.

Limit Order. An order made by a client to its stockbroker that has a specified fixed price limit.

Liquidation. This happens when a company converts all its assets into cash.

Liquidity. Refers on how a security can be easily bought or sold in a market.

Loan Stock. A stock that earns a fixed interest rate.

Market. The place where trading of services and goods are made.

Market Order. A prompt order that is made to buy or sell any stock at the best current price.

Market Value. Price that is set by a willing buyer or sellers for a stock of public companies.

Net Worth. Difference between the assets and liabilities of a company or corporation.

New Listing. A newly added security that is made available for trading in an exchange.

Odd Lot. A number of share that is not equal or less than the board lot.

Open Order. An order that is available until the order is cancelled by the investor.

Option. An investors right to buy and sell a certain stock at a certain price and certain time.

Par Value. Security’s nominal face value.

Portfolio. Securities that are held by a person or an institution.

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Preferred Stocks or Preferred Shares. Receives dividends first than common stocks but usually does not have voting rights.

Price-Earnings Ratio (P/E). Ratio between the company’s current share price and its per-share earnings.

Profit. Earnings of the company after its expenses are deducted from its revenues.

Revenue. Total amount of money generated by a business.

Securities. Is what you called investment vehicles like stocks, bonds, etc. that has its ownership transferable from one individual to another.

Yield. The return of an investment and is presented as a percentage of a share price.

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